WASHINGTON, July 29, 2014 – In a webinar on Thursday, July 17, the Fiber to the Home Council hosted a webinar with Federal Communications Commission officials on a $100 million fund for expanding broadband capabilities to rural communities. FCC officials encouraged companies to apply for the funds, but also cautioning them of the heavy commitment.
The FCC voted at its July 11 monthly meeting to authorize the experiments, and applicants have until Oct. 14 to bid for funding. The $100 million will be split into three categories, said Jonathan Chambers, Chief of the FCC’s Office of Strategic Planning & Policy Analysis. About $75 million will be used for testing networks that service plans at 25 Megabit per second downloads and 5 Mbps uploads. Another $15 million will go to testing delivery service at 10 Mbps down/1 Mbps upload speeds in high cost areas. The remaining $10 million will go to 10 Mbps down/1 Mbps upload service in remote rural areas.
The experiment will allow the FCC to test its reverse auction mechanism for Phase II of the Connect America Fund, and to better see where interest for high-speed broadband is expressed and by whom.
As a rule, Chambers said the FCC will not discriminate between types of services: “In terms of the expression of interest we received, we got ranges of projects in the hundreds of thousands and hundreds of millions of dollars. We wanted to ensure we get some diversity in the projects.”
The key is cost effectiveness, he added.
“We’re just going to select the most cost-effective project first, and then the second-most cost effective, and keep selecting until we’ve used up the $75 million, and the [follow the] same process for the $15 [and $10] million,” Chambers said. “As long as people meet the performance criteria…there’s no beauty contest. There’s no, ‘we value one type of service more than another.’ It’s going to be run as a reverse auction. Low bid wins.”
Limits will be placed on how much funding certain projects can bid for so that “several winners” are chosen, Chambers said. For example, projects in the high performance bracket are limited to $20 million. A percentage ranking system will determine which bids are most cost effective. Once entities are selected, support will be granted annually over a ten year period and the grunt work of building out or upgrading networks should ensue quickly.
“People should not be reluctant because they have a smaller project or a different type of project at all in terms of filing and participating in the program,” FTTH Council’s Counsel Tom Cohen said. “Don’t say, ‘they’re only going to do two projects.’”
Only price capped carriers in areas eligible for Phase II of the Connect America Fund can participate in the experiments, added Carol Mattey, Deputy Bureau Chief of the FCC. Funds will be distributed on a census block-by-block basis, added Chambers, to ensure “the fairest comparative measure.”
To make the process easier, companies don’t have to be eligible telecommunications carriers at the time of entering their bid, Mattey said. If they’re announced as winners in the public notice, however, then they must seek a designation as such an entity.
But while “the FCC is making it relatively easy to submit an application,” Cohen told applicants: “you better have your homework and due diligence work in your back pocket. Once you’re selected, you undertake a real obligation to do this. You don’t want to be in default. There are accountability measures the commission has to have so you need to keep that in mind.”
To secure the FCC’s dispersed fundings, companies need to obtain a letter of credit from eligible banks, as was done with the Mobility Fund, Mattey said. If performance failures are observed, the FCC “will draw on the letter of credit and recoup the funding.”
The build-out requirements once a bid has won are largely the same as those for Phase II of Connect America, Mattey added. Each company has three years to build out to 85 percent of locations, and to the rest by five years. Companies that already plans set in motion can opt for an accelerated disbursement of funding if they can commit upfront to meeting deployment of broadband to 25 percent of their area within 15 months. In exchange, 30 percent of funding will be delivered upfront.
In conjunction with the experiment, Chambers concluded by saying that the FCC is also undergoing a proceeding on potentially raising the definition of high-speed broadband. Currently, the FCC defines it at 4 Mbps. But it is considering the prospect of raising it to 10 Mbps, and perhaps even beyond that, he said.
Doug Lodder: How to Prevent the Economic Climate from Worsening the Digital Divide
There are government programs created to shrink the digital divide, but not many Americans know what’s out there.
From gas to groceries to rent, prices are rocketing faster than they have in decades. This leaves many American families without the means to pay for essentials, including cellphone and internet services. In fact, the Center on Poverty and Social Policy reports that poverty rates have been steadily climbing since March. We’re talking about millions of people at risk of being left behind in the gulf between those who have access to connectivity and those who don’t.
We must not allow this digital divide to grow in the wake of the current economic climate. There is so much more at stake here than simply access to the internet or owning a smartphone.
What’s at stake if the digital divide worsens
Our reliance on connectivity has been growing steadily for years, and the pandemic only accelerated our dependence. Having a cell phone or internet access are no longer luxuries, they are vital necessities.
When a low-income American doesn’t have access to connectivity, they are put at an even greater disadvantage. They are limited in their ability to seek and apply for a job, they don’t have the option of convenient and cost-effective telehealth, opportunities for education shrink, and accessing social programs becomes more difficult. I haven’t even mentioned the social benefits that connectivity gives us humans—it’s natural to want to call our friends and families, and for many, necessary to share news or updates. The loss or absence of connectivity can easily create a snowball effect, compounding challenges for low-income Americans.
The stakes are certainly high. Thankfully, there are government programs created to shrink the digital divide. The challenge is that not many Americans know what’s out there.
What can be done to improve it
In the 1980s, the Reagan administration created the federal Lifeline program to subsidize phones and bring them into every household. The program has since evolved to include mobile and broadband services.
More than 34 million low-income Americans are eligible for subsidized cell phones and internet access through the Lifeline program. Unfortunately, only 1 in 5 eligible people are taking advantage of the program because most qualified Americans don’t even know the program exists.
The situation is similar with the FCC’s Affordable Connectivity Program, another federal government program aimed at bringing connectivity to low-income Americans. Through ACP, qualifying households can get connected by answering a few simple questions and submitting eligibility documents.
Experts estimate that 48 million households—or nearly 40% of households in the country—qualify for the ACP. But, just like Lifeline, too few Americans are taking advantage of the program.
So, what can be done to increase the use of these programs and close the digital divide?
Our vision of true digital equity is where every American is connected through a diverse network of solutions. This means we can’t rely solely on fixed terrestrial. According to research from Pew, 27% of people earning less than $30,000 a year did not have home broadband and relied on smartphones for connectivity. Another benefit of mobile connectivity—more Americans have access to it. FCC data shows that 99.9% of Americans live in an LTE coverage area, whereas only 94% of the country has access to fixed terrestrial broadband where they live.
Additionally, we need more local communities to get behind these programs and proactively market them. We should see ads plastered across billboards and buses in the most impacted areas. Companies like ours, which provide services subsidized through Lifeline and ACP, market and promote the programs, but we’re limited in our reach. It’s imperative that local communities and their governments invest more resources to promote Lifeline, ACP and other connectivity programs.
While there’s no panacea for the problem at hand, it is imperative that we all do our part, especially as the economic climate threatens to grow the digital divide. The fate of millions of Americans is at stake.
Doug Lodder in President of TruConnect, a mobile provider that offers eligible consumers unlimited talk, text, and data, a free Android smartphone, free shipping, and access to over 10 million Wi-Fi hotspots; free international calling to Mexico, Canada, South Korea, China and Vietnam; plus an option to purchase tablets at $10.01. This piece is exclusive to Broadband Breakfast.
Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to firstname.lastname@example.org. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.
Senate Bill Subsidizing U.S. Semiconductor Production Clears House, Going to White House
Bill aims to strengthen American self-reliance in semiconductor chip production and international competition.
WASHINGTON, July 29, 2022 – A $54 billion bill to subsidize U.S-made semiconductor chips passed the House Thursday on a 243-187, and moves to President Biden for his expected signature.
Dubbed the CHIPS Act for Creating Helpful Incentives to Produce Semiconductors Act for America Fund, the measure is expected to incentivize domestic semiconductor manufacturing and also provide grants for the design and deploying of wireless 5G networks. It also includes a $24 billion fund to create a 25 percent tax credit for new semiconductor manufacturing facilities.
Advocates of the measure say that it will also improve U.S. supply chain, grow U.S. domestic workforce, and enable the U.S. to compete internationally to combat national security emergencies.
The measure passed the Senate Wednesday on a 64-33 vote.
Congressional supporters tout benefits
House Energy and Commerce Committee Chairman Frank Pallone, D-N.J., voiced his support on the House floor, calling it “a win for our global competitiveness.”
The CHIPS Act of 2022 provides a five-year investment in public research and development, and establishes new technology hubs across the country.
Of the funds, $14 billion goes to upgrade national labs, and $9 billion goes to the National Institute of Standards and Technology research, of which $2 billion goes to support manufacturing partnerships, and with $200 million going to train the domestic workforce.
In a virtual press conference on Tuesday, Colorado Democratic Sen. Michael Bennett said that America’s semiconductor industry has lost ground to foreign competitors. “Today, only 12% of chips are manufactured in the United States, down from 37% in the 1990s.”
He said relying on cheaper products produced in China and overseas for so long, it has caught up with the United States.
Bennet suggested to move manufacturing labs to Colorado, where it can support it due to the plenty of jobs in aerospace and facility and infrastructure space.
“We don’t want the Chinese setting the standard for telecommunications. America needs to lead that. This bill puts us in the position to be a world leader,” said Bennet. “We are at a huge national security disadvantage if we don’t do this.”
Sen. John Hickenlooper, D-Colorado, joined his Rocky Mountain state colleague in support: “There is a real sense of urgency here to compete not only to re-establish the U.S. to make their own chips, but to compete internationally.”
He said that semiconductor chips are vital to almost every business and product, including phones, watches, refrigerators, cars, and laptops. “I’m not sure if I can think of a business that isn’t dependent on chips at this point.”\
“This is a space race,” he said. “We cannot afford to fall behind.”
Industry supporters say measure is necessary
The U.S. has lost ground to foreign competitors in scientific R&D and in supply chain industry during a recent semiconductor crisis, said France Córdova, president of the Science Philanthropy Alliance, at a U.S. Chamber of Commerce Foundation event on July 19. The U.S. only ranks sixth best among other prominent countries in the world for research and development, she said.
“The CHIPS Act of 2022 and FABS Act are critical investments to even the global playing field for U.S. companies, and strategically important for our economic and national national security,” said Ganesh Moorthy, president and CEO of Microchip Technology Inc.
Bide expected to sign measure
With the Biden’s Administration’s focus to tackle the semiconductor shortage and supply chain crisis through the Executive Order made in February, the Biden administration has been bullish on the passage of the CHIPS Act, in a Wednesday statement:
“It will accelerate the manufacturing of semiconductors in America, lowering prices on everything from cars to dishwashers. It also will create jobs – good-paying jobs right here in the United States. It will mean more resilient American supply chains, so we are never so reliant on foreign countries for the critical technologies that we need for American consumers and national security,” said Biden.
Providers Call for More FCC Telehealth Funding as Demand Grows
‘I think obtaining funding from the Universal Service Fund would go a long way.’
WASHINGTON, July 26, 2022 – Health care providers in parts of America say they are struggling to deliver telehealth due to a lack of broadband connectivity in underserved communities, and recommended there be more funding from the Federal Communications Commission.
While the FCC has a $200-million COVID-19 Telehealth program, which emerged from the Coronavirus Aid, Relief and Economic Security (CARES) Act, some providers say more money is needed as demand for telehealth services increases.
“The need for broadband connectivity in underserved communities exceeds current availability,” said Jennifer Stoll from the Oregon Community Health Information Network.
The OCHIN was one of the largest recipients of the FCC’s Rural Health Care Pilot program in 2009. Stoll advocated for the need for more funding with the non-profit SHLB Coalition during the event last week. Panelists didn’t specify how much more funding is needed.
Stoll noted that moving forward, states need sustainable funding in this sector. “I am hoping Congress will be mindful of telehealth,” said Stoll.
“The need for telehealth and other virtual modalities will continue to grow in rural and underserved communities,” she added.
Brian Scarpelli, senior global policy counsel at ACT, the App Association, echoed the call for FCC funding from the Universal Service Fund, which subsidizes basic telecommunications services to rural areas and low-income Americans. “I think obtaining funding from the Universal Service Fund would go a long way.”
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